Repeat offenders appear to be a disturbing but common reality when it comes to bookkeeper fraud.
The following headline is from the Times News of Knoxville, Tennessee (February, 2011):
“East Tennessee Bookkeeper Who Stole $4 Million to Finance Luxury Lifestyle Pleads Guilty”
One of the most disturbing aspects about this story is the fact that the perpetrator was already on probation for committing fraud two years earlier.
Unfortunately, this is a story that we read again and again. Repeat offenders are a common occurrence in bookkeeper fraud.
A CFO of a multinational company reported that a bookkeeper had used the owner’s signature stamp to sign checks that were deposited in the bookkeeper’s personal account. The fraud was discovered and the bookkeeper was prosecuted. The CFO moved on to a different company where a contractor had the same bookkeeper use a knife to pick the lock where the company’s checks were kept. The objective: to deposit the checks in the bookkeeper’s personal bank account.
The truth is, there are many ways in which a bookkeeper can commit fraud against his/her employer. What can you do to protect yourself from this happening at your business?
There are a couple of things you can do to lower the risk of falling victim to bookkeeper fraud.
The first is to run a criminal background check before hiring a bookkeeper. Background checks are time consuming and often expensive but any amount of money seems small when compared to the possible consequences. Unfortunately, not all background checks are 100% reliable. In today’s dynamic economy, people often move, information is not always updated in a timely -or accurate- manner and people aren’t always forthcoming when revealing their personal/professional history- particularly if there is something to hide.
The second option requires a bit of a change in perspective. Have someone other than an in-house bookkeeper handle your company’s bookkeeping needs. Outsourcing your bookkeeping will provide many instant benefits for your business, safety being number one.
If you’re ready to make a change and want to find out about safer, cost effective bookkeeping solutions for your small business please e-mail us at Info@CashFlowAccounting.com.